Universal Orlando Resort Expansion (Part 1)

[rhino4evr]

The Last Hobbit movie came out in 2014. The last Potter movie came out in 2011.

They are still making big budget Lord of the Rings themed video games as well.

To say it's an "outdated" franchise is a huge insult. The series is a timeless classic. It has millions of fans. Game of Thrones definitely has captured and expanded on a lot of that audience though.

 

[GAcoaster]

The legal battles and any kind of site remediation still needed (I believe most of it was completed before universal sold it off) just gives creative more time to refine designs and plans. This also gives them more time to work out deals with IP holders and keep incorporating new innovations and ideas into the designs. I expect the resort area will be similar to the existing one with the hotels and Citywalk type areas connected with transportation and walkways creating a real resort feel. I have to believe they will also connect the two properties with some sort of transportation system.

 

[zg44]

I'm sure Universal has spoken to Lockheed about their expansion plot of land on Sand Lake Road, but a more interesting transaction would be if Universal could pay them to move their building on the east side onto the expansion plot and then sell that east side land to Universal after the new building is completed, something like this:

Example: Lockheed sells the 40 acres in orange to Universal for $60 million and gets a 4-6 year (or however long they'd need to design/build a new building on the expansion plot) lease in exchange or something to that effect. A transaction like that would be interesting, though obviously it all comes down on Lockheed's willingness to sell at the right price.

 

[fryoj]

I'm sure Universal has spoken to Lockheed about their expansion plot of land on Sand Lake Road, but a more interesting transaction would be if Universal could pay them to move their building on the east side onto the expansion plot and then sell that east side land to Universal after the new building is completed, something like this:

Example: Lockheed sells the 40 acres in orange to Universal for $60 million and gets a 4-6 year (or however long they'd need to design/build a new building on the expansion plot) lease in exchange or something to that effect. A transaction like that would be interesting, though obviously it all comes down on Lockheed's willingness to sell at the right price.

While an interesting idea, I think if Uni starts negotiating with Lockheed to start moving buildings, they will be negotiating for the whole property and not just that 40 acres.

 

[zg44]

While an interesting idea, I think if Uni starts negotiating with Lockheed to start moving buildings, they will be negotiating for the whole property and not just that 40 acres.

Yeah, I'm just assuming this was the 2nd query in any conversation; first they'd probably ask whether they'd ever plan a move in the next 10-15 years, and second they ask for at least that slice or the expansion plot.

I'd have to guess that Lockheed isn't long for that site anyways; it's a great plot at ~280 acres, but it's going to be tourist-hell in 10 years. Regardless, Universal is probably the first buyer in any future sale of the whole thing.

 

[Happytycho]

I'm sure Universal has spoken to Lockheed about their expansion plot of land on Sand Lake Road, but a more interesting transaction would be if Universal could pay them to move their building on the east side onto the expansion plot and then sell that east side land to Universal after the new building is completed, something like this:

Example: Lockheed sells the 40 acres in orange to Universal for $60 million and gets a 4-6 year (or however long they'd need to design/build a new building on the expansion plot) lease in exchange or something to that effect. A transaction like that would be interesting, though obviously it all comes down on Lockheed's willingness to sell at the right price.

I could see Lockheed having some interest in this because it would help them maintain a secure perimeter around all of their facilities after the Kirkman extension is built.

While an interesting idea, I think if Uni starts negotiating with Lockheed to start moving buildings, they will be negotiating for the whole property and not just that 40 acres.

Uni may not be interested in spending hundreds of millions to buy polluted land that they may not need.
It makes me wonder what the price of the Lockheed land would look like versus what it would cost to buy seaworld orlando and how much different they would really be.

 

[Scott W.]

With maybe the exception of Star Trek, I think that LOTR is that last of the great IPs missing from a theme park and with so much to work with, I can’t see Universal not knocking it out the park.

Working with Peter Jackson on Kong should hopefully have made a solid foundation to bring LOTR to life.

 

[fryoj]

Yeah, I'm just assuming this was the 2nd query in any conversation; first they'd probably ask whether they'd ever plan a move in the next 10-15 years, and second they ask for at least that slice or the expansion plot.

I'd have to guess that Lockheed isn't long for that site anyways; it's a great plot at ~280 acres, but it's going to be tourist-hell in 10 years. Regardless, Universal is probably the first buyer in any future sale of the whole thing.

If I'm Uni and I have any plans on ever owning that property, I'm of the mind to buy it now. Rather than after 15 years of development and their own company increasing property values. Of course, that all depends on Lockheed being willing to sell.

But all else being equal, The cost of buying that 40 acres and having to pay Lockheed to move the building on that plot is probably more expensive than just buying the 100 acre expansion pad and diverting plans around that 40 acres. If it were 100 acres or more intrusive on their property, it would be a bigger deal. As it, it shouldn't be that hard to plan around.

I could see Lockheed having some interest in this because it would help them maintain a secure perimeter around all of their facilities after the Kirkman extension is built.


Uni may not be interested in spending hundreds of millions to buy polluted land that they may not need.
It makes me wonder what the price of the Lockheed land would look like versus what it would cost to buy seaworld orlando and how much different they would really be.

The Kirkman extension is a legit argument.

But the reason you do the Lockheed plant versus Sea World is to keep the resort compact rather than having to shuttle people from off property. Whatever the cleanup costs are, they will be eventually be outweighed by transportation costs. Of course that depends on Uni's long term plans. If they don't plan on eventually having 4 dry parks, the point is moot.

 

[zg44]

If I'm Uni and I have any plans on ever owning that property, I'm of the mind to buy it now. Rather than after 15 years of development and their own company increasing property values. Of course, that all depends on Lockheed being willing to sell.

But all else being equal, The cost of buying that 40 acres and having to pay Lockheed to move the building on that plot is probably more expensive than just buying the 100 acre expansion pad and diverting plans around that 40 acres. If it were 100 acres or more intrusive on their property, it would be a bigger deal. As it, it shouldn't be that hard to plan around.



The Kirkman extension is a legit argument.

But the reason you do the Lockheed plant versus Sea World is to keep the resort compact rather than having to shuttle people from off property. Whatever the cleanup costs are, they will be eventually be outweighed by transportation costs. Of course that depends on Uni's long term plans. If they don't plan on eventually having 4 dry parks, the point is moot.

Yeah, the point I was more making was that Lockheed may not be able to sell now. They're currently expanding their capacity in Central Florida and this plant is at the center of their short/mid-term plans. At least getting them to consolidate their property and allowing Universal to consolidate along Kirkman as @Happytycho pointed out is a good short/mid-term accomodation for both parties.

 

[tielo]

I'd be as giddy as a schoolgirl if they open a Middle Earth themed land. The possibilities for locations, food, shops and rides are endless. Or we end up with a location that no one heard of and is called "Middle Earth's edge".

 

[Happytycho]

But the reason you do the Lockheed plant versus Sea World is to keep the resort compact rather than having to shuttle people from off property. Whatever the cleanup costs are, they will be eventually be outweighed by transportation costs. Of course that depends on Uni's long term plans. If they don't plan on eventually having 4 dry parks, the point is moot.

Yeah SeaWorld would definitely be more expensive and have a lower return. I was just having a momentary pipe dream about how strong of a position Universal would be in if they were able to get a dedicated transportation system that went uni north-uni south-OCCC-SeaWorld.

 

[Mr. EPCOT]

@Legacy LOTR is definitely a needle mover. Idk if it’ll be as big as Potter/SW, but it’ll definitely be as big of a draw as Nintendo

That is CRAZY talk. Nintendo has WAY broader appeal, if for no other reason than those dense freaking Tolkien books are above your average kids reading level, whereas kids can start playing Nintendo as young as like four years old or so.

 

[JungleSkip]

That is CRAZY talk. Nintendo has WAY broader appeal, if for no other reason than those dense freaking Tolkien books are above your average kids reading level, whereas kids can start playing Nintendo as young as like four years old or so.

Agree to disagree. LOTR has a massive, decades long fan base. It may not be as big as Nintendo but it’s close. Neither is as big as SW/Potter

 

[zg44]

That is CRAZY talk. Nintendo has WAY broader appeal, if for no other reason than those dense freaking Tolkien books are above your average kids reading level, whereas kids can start playing Nintendo as young as like four years old or so.

It's not that simple because of the overlap in terms of Harry Potter and Nintendo in how they aim at young people and the fact that many attractions at most of the major parks already do. In an economic sense, there's more marginal value to adding Star Wars or Tolkien to a theme park because they bring in larger groups that may not necessarily already be in your audience or it increases the # of visits specific target groups make. Star Wars and Tolkien hit a broad group of people aged 18 through 55 that are probably rarer theme park vacationers than average (for a variety of specific reasons).

It's similar to how with Harry Potter, Universal has taken a giant chunk of the UK's foreign vacations market and is probably drawing its highest market share out of that market (probably as high as 40% compared to WDW, that's a massive % given the # of parks disparity between UOR and WDW). Even SeaWorld pointed out that the UK was around 15% of SeaWorld Orlando's attendance, but that group has almost entirely dried up by now (due to Harry Potter).

In terms of how specific IPs can drive attendance, only Harry Potter should be considered above Star Wars and Tolkien.

 

[quinnmac000]

Agree to disagree. LOTR has a massive, decades long fan base. It may not be as big as Nintendo but it’s close. Neither is as big as SW/Potter

Disagree...Star Wars/Potter may have a larger hardcore fanbase but Nintendo has a more vast causal fandom, international appeal, as well as not being as controversial with certain communities.

Both of the previous two are mostly isolated within the Americas and Europe while Nintendo has a much larger footprint.

 

[twebber55]

TBH i have no idea what Hyrule is

 

[zg44]

TBH i have no idea what Hyrule is

It's the main city/region of the Zelda games; Hyrule is the kingdom with Zelda's castle.

 

[UniversalRBLX]

All the Tolkien franchises basically have smaller "hard core fans" than Nintendo/Star Wars, BUT they still have a very large general public following. Star Wars and Harry Potter have very large hard core fans with Nintendo lagging behind just a bit.

 

[Scott W.]

Given the current state of Hollywood with all the sexual allegations coming to light, you have to wonder if the people picking the lands and IPs are making extra sure that the stars of the show are absolutely squeaky clean.

 

[IAmFloridaBorn]

TBH i have no idea what Hyrule is

Look, Outside of Mario, Luigi, Toad and Yoshi, I dont know anything about the extra characters. So dont feel bad. haha